Beacon Securities Ltd.| 66 Wellington Street West Suite 4050, Toronto, Ontario, M5K 1H1 |416.643.3830 |www.beaconsecurities.ca Cardinal Resources (CDV-TSX) West Africa’s Largest, New Gold Discovery January 16, 2018 Michael Bandrowski (416) 643-3870 [email protected]We are initiating coverage of Cardinal Resources (CDV-TSX) with a BUY rating and a 12-month target price of $1.35/sh. Our valuation is based on the following: Large Scale Resource with Plenty of Upside Cardinal Resources has delineated a 7.4MM oz. resource grading 1.1 g/t Au in the Indicated and Inferred categories, at its flagship Namdini gold project. While Namdini remains open, we see significant upside at Kungongo where a 4.2km x 300m gold-in-soil anomaly has been identified and Ndongo where an RC scout drilling program has commenced on gold-in- soil anomalous targets. PEA to be Released Q1 2018 The company plans to release a Preliminary Economic Assessment (PEA) for its Namdini project in Q1 2018. Recent starter pit drilling results have been extremely positive and suggest a higher grade, low strip scenario could dramatically reduce the payback period for this large scale development project. Mining Friendly Jurisdiction Ghana has a long mining history, established mining laws, royalty and tax regimes in place. In addition, Ghana has a skilled workforce and good infrastructure. Several large and medium sized companies are currently operating in country including Newmont, Kinross, Gold Fields, Golden Star and Anglogold Ashanti. Initiating Coverage BUY C$1.35 Previous Close 0.50 12-month Target Price 1.35 Potential Return 170% 52 Week Price Range $0.43 - $1.05 All prices in CDN unless indicated Estimates YE:June 30 FY17E FY18E FY19E Au Price (US$/oz.) $1,300 $1,300 $1,300 Production Au (000 oz.) - - - Revenue ($MM) $0.0 $0.0 $0.0 EPS nmf nmf nmf CFPS nmf nmf nmf Valuation P/E nmf nmf nmf P/CF nmf nmf nmf Stock Data (MM) Shares Outstanding Basic 350 FD 350 Market Cap Basic 175 FD 175 Cash $20.0 Enterprise Value 155 Major Shareholders Gold Fields 11% Dynamic 11% About the Company Cardinal Resources is an Australian based gold developer currently advacning the Namdini Gold Project located in northern Ghana. The company will be releasing a revised reosurce estimate and Preliminary Economic Assessment in H1 2018. Stock Performance
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Beacon Securities Ltd.| 66 Wellington Street West Suite 4050, Toronto, Ontario, M5K 1H1 |416.643.3830 |www.beaconsecurities.ca
Total Liabilities 5.4 $0.01 P/CFPS nmf nmf nmf nmf
Target/CFPS nmf nmf nmf nmf
Net Asset Value 911 1.66$
Management & Directors
Archie Koimtsidis, CEO/MD Michele Muscillo, Director
Kev in Tomlinson, Non-Executiv e Chairman Robert Schafer, Director
Malik Easah, Executiv e Director Bruce Lilford, Project Manager
Jacques McMullen, Director
Beacon Securities Ltd.| 66 Wellington Street West Suite 4050, Toronto, Ontario, M5K 1H1 |416.643.3830 |www.beaconsecurities.ca
Disclosure Requirements
Does Beacon, or its affiliates or analysts collectively, beneficially own 1% or more of any class of the issuer's equity securities? Yes No
Does the analyst who prepared this research report have a position, either long or short, in any of the issuer’s securities? Yes No
Does Beacon Securities beneficially own more than 1% of equity securities of the issuer? Yes No
Has any director, partner, or officer of Beacon Securities, or the analyst involved in the preparation of the research report, received remuneration for
any services provided to the securities issuer during the preceding 12 months?
Yes No
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this issuer in the past 12 months? Yes No
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Department? Yes No
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the Investment Industry Regulatory Organization of Canada (IIROC). All facts and statistical data have been obtained or ascertained from sources,
which we believe to be reliable, but are not warranted as accurate or complete.
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Limited takes no responsibility for any errors or omissions contained herein, and accepts no legal responsibility from any losses resulting from investment
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their volatility, income structure, or eligibility for sale, the securities mentioned herein may not be suitable or available for all investors in all countries.
As at December 31, 2017 #Stocks Distribution
BUY 69 75.0% Buy Total 12-month return expected to be > 15%
Speculative Buy 13 14.1% Speculative Buy Potential 12-month return is high (>15%) but given elevated risk, investment could result in a material loss
Hold 9 9.8% Hold Total 12-month return is expected to be between 0% and 15%
Sell 0 0.0% Sell Total 12-month return is expected to be negative
Under Review 1 1.1%
Tender 0 0.0% Tender Clients are advised to tender their shares to a takeover bid or similar offer
Total 92 100.0%
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